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USD/CAD binary signal - BoC Monetary policy meeting - 17 Jan 2018

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Expiry Time: 
21:00 GMT
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The Bank of Canada will be meeting today at 15:00 GMT for the monthly monetary policy meeting. According to the economists polled, the BoC is expected to hike interest rates at today's meeting.

The BoC last hiked interest rates at the September meeting. It was the second rate hike in 2017 and brought the BoC's overnight rate to 1.0%. The markets were taken by surprise by the BoC's back to back rate hikes last year. In December, the BoC was expected to follow through with another rate hike but the central bank came out dovish as it held rates steady.

Economic data since the December meeting has been broadly supportive of a rate hike. Most importantly, the Canadian labor market showed a significant increase in activity with slack in the labor market showing signs of diminishing.

As a result, inflation is also expected to rise even further. The previous declines in the Canadian dollar's exchange rate also helped to push the Canadian exports slightly higher for two consecutive months.

Therefore, the BoC is expected to hike interest rates by 25 basis points at today's meeting. The rate hike has already been priced in by the markets. Focus will turn to the BoC's forward guidance.

Based on the above, today's binary forex signal is USDCAD. From a technical stand point, there is a possibility that USDCAD could be bullish in the short term. Therefore, we are looking to purchase daily Call options at 1.2435 for a 21:00 GMT expiry time.

We expect the currency pair to initially retrace based on the BoC's rate hike decision and fall to 1.2435 before closing higher on the day.

binary options signal usdcad 17 jan 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.